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The yen hovered near its 2-1/2-year low against the dollar on Tuesday, bolstering Japanese shares to multi-year highs on expectations for more aggressive monetary easing from the Bank of Japan.

Other Asian stock markets were capped on earnings and US fiscal concerns. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.1 percent, with Australian shares up 0.2 percent and South Korean shares opening nearly flat.

Japan's benchmark Nikkei stock average opened up 1 percent to its highest level since late April 2010 on continued yen weakness, which improves earnings prospects for exporters. Japanese financial markets were closed on Monday for a public holiday.

The yen remained pressured as investors hope for bolder monetary and fiscal steps under the government of Prime Minister Shinzo Abe, whose cabinet last week approved a $117 billion stimulus package, the biggest spending boost since the global financial crisis, in an effort to support the economy.

The dollar was at 89.47 yen, near its peak since June 2010 of 89.67 yen hit on Monday, while the euro traded at 119.73 yen, near its highest since May 2011 of 120.13 hit on Monday. Against the Australian dollar, the yen hovered near 94.64, its lowest since August 2008 touched on Monday.

"The yen is likely to stay under selling pressure with 90 yen in sight, supported by expectations for the Bank of Japan to be proactive about realising a 2 percent inflation target," said Masafumi Yamamoto, chief FX strategist at Barclays in Tokyo.

"Improving US economic indicators have helped underpin the dollar, but the momentum seems to be slowing. Surprisingly slower US growth data could become a minor risk factor for a higher dollar/weaker yen scenario," he said.

The pan-European FTSEurofirst 300 closed at a two-week low on Monday, as a sell-off in US shares on concerns over demand for Apple's